Sep 17, 2020 at 08:01 UTCUpdated Sep 17, 2020 at 08:02 UTC
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The Gibraltar Financial Services Commission (GFSC) has updated its guidance notes for distributed ledger technology (DLT) providers, the regulator announced Thursday. The amended guidance now includes clarity on token issuances and recommendations for risk management.
- The GFSC has made considerable updates to seven out of the nine guiding principles on which the regulatory framework, launched in 2018, was set up.
- According to the announcement, the changes reflect the “natural evolution of the defined regulatory principles” to include new developments in the space.
- The updates include a risk framework to distinguish between virtual assets and virtual asset denominated instruments that are arguably higher risk, the announcement said.
- The guidance on tokens specifies that following a public token offering, DLT providers will not be allowed to use reserves of internally generated tokens as part of its regulatory capital requirement, and includes a section detailing risks associated with stablecoins.
- The new updates are part of an ongoing effort to adapt its regulatory framework to include the latest Financial Action Task Force (FATF) recommendations for virtual asset service providers.
- The European Union has criticized Gibraltar’s efforts to stem money laundering in the past, mentioning its DLT rules in the process.
- Currently, 13 DLT providers are licensed under the Gibraltar regulator, including international platforms like eToro, Xapo and Bitso.
Also read: Leaked EU Draft Proposes All-Encompassing Laws for Crypto Assets
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